HTC avoids two-front patent war with Microsoft pact

Microsoft and HTC have struck a licensing agreement over HTC's sale of Android …

Microsoft has announced that it has signed a patent agreement with mobile phone manufacturer HTC for the sale of Android-equipped devices. Neither company disclosed the terms of the deal or even the patents that Microsoft agreed to license; Microsoft merely said that it would receive royalties from HTC and that it would expand HTC's "long-standing business relationship" with the company.

"We have a responsibility to our customers, partners, and shareholders to ensure that competitors do not free ride on our innovations," Microsoft IP deputy general counsel Horacio Gutierrez said in a statement. "We have also consistently taken a proactive approach to licensing to resolve IP infringement by other companies, and have been talking with several device manufacturers to address our concerns relative to the Android mobile platform."

The deal is unusual since it involves the sale of open source Android devices, not Windows Mobile-equipped phones (which HTC also sells). And, because Android is open, Google doesn't get the same kickbacks from HTC. With this agreement, Microsoft has found a way to make at least a little bit of money off of Android's growing success despite having virtually no involvement in it.

HTC's agreement with Microsoft is good for both companies, but not because Microsoft will help HTC fight Apple in its own patent war. Earlier this year, Apple accused the smartphone maker of violating at least 20 Apple patents, many of which focus on aspects of the OS. HTC didn't take the accusations lying down either, pointing out that it has been making mobile devices for 13 years and has a patent portfolio of its own. Google also lent support by saying that it stands behind Android and its partners.

What it does mean is that HTC won't find itself in the middle of a similar patent infringement suit with Microsoft. If anything, HTC's problems with Apple might have encouraged the company to be a little more friendly at the bargaining table with Microsoft in order to ensure that it only has one multibillion dollar corporation on its back—not two.

Looking beyond HTC's little world, Google may want to consider how its future partners are going to be affected by their implementations of Android. As Altimeter Group analyst and partner Michael Gartenberg noted on his blog, Android becomes a little less free if handset makers have to consider a licensing agreement versus a costly legal battle with either Apple or Microsoft, or both.